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Last Updated: Tuesday, 24 August, 2004, 17:30 GMT 18:30 UK
Egypt 'to step up privatisations'
A street market in Cairo
Private enterprise needs boosting to tackle poverty, the IMF says.
An Egyptian official has reportedly said that six state-run engineering firms are being considered for a sell-off in September.

The move is seen as a sign that Egypt's new government is serious about a fresh wave of privatisations.

The chair of Egypt's Metallurgical Industries Holding Company said valuations were taking place, the Middle East News Agency reported.

The International Monetary Fund has urged Egypt to cut state firms loose.

Investors and international bodies had been hoping for a revival of Egypt's privatisation programme.

Signs of change

The appointment of Mahmoud Mohieldin, a reform-minded technocrat, to the new post of investment minister in July was taken as a sign that more privatisations were on the way.

He was appointed by the country's new prime minister, Ahmed Nazief.

Egypt's Prime Minister Ahmed Nazief
Egypt's Prime Minister Ahmed Nazief is expected to escalate reform

Egypt sold off 190 state-run companies and facilities from the early 1990s to 1997, garnering proceeds of 17bn Egyptian pounds ($2.7bn; 1.5bn), according to a report issued by the Ministry of Public Enterprise in mid-2002.

The privatisations proved controversial at the time.

The Ministry's report cited ex-planning minister Ismail Sabri as saying that that there had been "no noticeable improvement in the management or productivity of the companies that were sold off". Mr Sabri called for greater transparency and open bargaining.

Both the IMF and World Bank have urged Egypt to remove obstacles to the development of the private sector which they say has a vital role to play in reducing poverty by expanding the economy.

In a July 2002 report, the IMF said there had been limited progress in privatising state enterprises, but added that the government was contemplating an ambitious privatisation programme.

It urged "a significant acceleration in the pace of structural reform".

Egypt's economy has picked up pace since mid-2003, after three years of modest growth averaging 3%, the IMF said.

It is forecasting 4.5% growth for the 2004-05 financial year.

The six companies reportedly being evaluated for sell-offs are Alexandria Company for Refractories; Sornaga Company for Ceramics; Egyptian Ferro Alloys Company; General Metals Company; Cairo Metal Products Co and Egyptian Mechanical Precision Industries.




SEE ALSO:
Economic reformers rise in Egypt
14 Jul 04  |  Business
Mubarak swears in new government
14 Jul 04  |  Middle East


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